Issue Brief

Do Districts Enrolling High Percentages of Minority Students Spend Less?

Brown v Board of Education, the landmark Supreme Court case in 1954, clearly
documented inequality in the provision of public education for minority
students. The doctrine of "separate but equal" was found to be
unconstitutional because segregated services were found to be inherently
unequal. These schools were also unequal due to the fact that education
expenditures were lower in these minority schools (Ashmore 1954).

Over 40 years later, questions of possible inequities in education spending
based on race remain. Relatively few empirical studies have carefully examined
this question through the use of national data. However, at least one
descriptive study of selected school districts, Kozol's Savage Inequalities
(1991), presents a searing indictment of inequality in American education and
what it can mean for individual children. This case study analysis suggests a
strong relationship between minority enrollment and inadequate resources.

The purpose of this brief is to explore the relationship between the
percentage of minority students and education spending across the school
districts of the nation using data from the 198990 school year. Do
high-minority districts have less to spend than low-minority districts? How does
this relationship change when it is considered in terms of educational "buying
power" rather than actual dollars?

"Buying power" is a new concept currently under development by the
education research community. Actual dollars are expressed to reflect
differences in the relative costs of providing educational services. For the
purpose of this analysis, this adjustment accounts for differences in the cost
of living and differences in the educational needs of students. The
cost-of-living adjustment reflects the fact that an expenditure of $6,000 per
student in New York City buys substantially less in actual education resources
(e.g., teacher time, supplies, and equipment) than a comparable expenditure in
Des Moines, Iowa. The need adjustment takes into account expenditure differences
that result from the additional resources required to provide an education to
students in need of special education, bilingual, and compensatory education
services. For example, the same average expenditure per student is not likely to
go as far in districts with large numbers of students with severe disabilities./1

A last question is that when considered with other variables that may be
statistically related to race (e.g., poverty), to what degree is race alone
associated with differences in school district spending?

These findings are taken from a Research and Development Report (Parrish,
Matsumoto, and Fowler 1995) produced by the National Center for Education
Statistics. Since this research is intended to be developmental in nature, these
results should be considered tentative and suggestive.

Districts with the highest percentages of minority enrollment spend the
most on public education.

One approach to examining the relationship between minority enrollment and
education spending is to compare public school expenditures in districts with
different levels of minority enrollment. Figure 1 shows expenditures for four
categories of school districts by the percentage of minority students enrolled.
Each of these four categories of school districts represents about 25 percent of
the nation's public school children. Figure 1 shows that on average, during the
198990 school year, spending was fairly equal across school districts with
less than 50 percent minority enrollment. However, districts in which 50 percent
or more of the students enrolled were racial minorities spent more than those
districts with less than 50 percent minority enrollment. For example, the
average expenditure differential between districts with the highest and the
lowest percentage of minority students was $431 per student ($5,474 versus
$5,043).

When education spending is considered in terms of "buying power,"
districts with the highest percentage of minority students spend the least.

In terms of "buying power" in school year 198990, districts
with the highest percentages of minority students spent $286 less on public
education per year than did districts with the lowest percentages of minority
students ($4,103 vs. $4,389 per student) (figure 2). This change in direction
occurs because school districts enrolling high percentages of minority students
are more likely to be located in high-cost urban centers and to serve
substantial numbers of students with special needs, thereby reducing the "buying
power" of the dollars received.

When race is considered simultaneously with other variables related to
district spending, race does not appear to be a factor in lower levels of "buying
power" in high-minority districts.

In an attempt to isolate the effect of race using additional statistical
procedures, the association of district minority enrollment to education "buying
power" can be considered simultaneously with other variables likely to be
related to district spending. School district wealth, enrollment, and
percentages of limited English proficient, special education, and at-risk
children are examples of some of the variables included./2

This approach reveals a positive association between minority enrollment and
expenditures among districts that were similar with respect to wealth, size,
location, and types of students in attendance in school year 198990.
Expressed in terms of "buying power," and with other related variables
held constant, the average expenditure in districts enrolling the highest
percentages of minority students was $594 greater than in their lowest minority
enrollment counterparts ($4,514 - $3,920) (figure 3).

Discussion

How do these results address questions about percentages of minority
students and school district spending? In terms of actual expenditures (figure
1) in school year 198990, the nation's highest minority districts spent
the most on their students' public education. When these expenditures are
converted to "buying power" (figure 2), this relationship changes
direction. Taking the analysis one step further, attempting to sort out the
unique association of race with education spending, the relationship between
education spending and the percentage of minority enrollment is again positive
(figure 3).

These varied results reflect some of the difficulties involved in attempting
to measure equity of educational expenditures. While high-minority districts
have the most to spend in actual dollars per student, they also tend to be
located in some of the nation's most urbanized and expensive settings. These are
the very districts portrayed in such case study accounts as Kozol's (1991) and
are often described as some of the nation's most distressed school districts. It
is also interesting to note that 53.5 percent of African Americans rate their
local school systems as "fair/poor" compared to 30.1 percent for the
general population (Joint Center for Political and Economic Studies 1996). The
findings presented in this brief suggest that higher education expenditures in
high-minority districts (figure 1) translate into lower levels of actual "buying
power" (figure 2). However, when race is considered simultaneously with
other variables related to district spending (figure 3), race does not appear to
be a factor in lower levels of actual "buying power" in high-minority
districts. Minority children in poverty are often viewed as those least served
through current public education allocation systems. These findings suggest that
although general inequalities may remain for students in poverty, they do not
seem to be directly associated with minority status. The alternative measures of
education resources and varied findings presented in this brief illustrate some
of the complexities associated with these types of equity analyses. It is hoped
that these initial findings will stimulate additional research on this important
policy topic.

1/It has long been recognized that cost and need
adjustments are important to analyses of equity in education (Beme and Stiefel
1984). An index calculated by McMahon and Chang (1991) is used to reflect
differences in the cost of living across the nation. The "student need
index" includes counts of the three categories of special-need students most
prominently recognized through state and federal categorical funding provisions:
special education, limited English proficient, and poverty. Because these
adjustments assign students with special needs a count greater than one, average
"buying puwer" per student (figure 2) is less than the average
expenditure per student (figure 1), For a detailed discussion of these
adjustments, see Parrish, Matsumoto, and Fowler (1995).

2/For a full description of the variables and statistical
procedures, see Parrish, Matsumoto, and Fowler (1995).

References:

Ashmore, H.S. (1954). The Negro and the Schools. Chapel Hill: The
University of North Carolina Press.

Berne, R. and Stiefel, L. (1984). The Measurement of Equity in School
Finance. Baltimore, MD: Johns Hopkins University Press.

Joint Center for Political and Economic Studies, 1996 Joint Center for
Political and Economic Studies. (1996). National Opinion Poll on Social
Attitudes. Washington, D.C.

Kozol, J. (1991). Savage Inequalities. New York: Crown.

McMahon, W.W. and Chang, S. (1991). Geographical Cost of Living
Differences: Interstate and Intrastate, Update 1991. MacArthur/Spencer
Series Number 20. Normal, IL: Center for the Study of Educational Finance,
Illinois State University.

Parrish, T.B., Matsumoto, C.S., and Fowler, Jr., W. (1995).
Disparities in Public School District Spending: 198990.
Washington, D.C.: U.S. Department of Education, National Center for Education
Statistics (NCES Research and Development Report No. 95300).

This Issue Brief is based on an NCES Research and Development Report
(Parrish, Matsumoto, and Fowler 1995). NCES Research and Development reports
were initiated (1) to share studies and research that are developmental in
nature, (2) to share the results of studies that are, to some extent, on the "cutting-edge"
of methodological developments, and (3) to participate in discussions of
emerging issues of interest to education researchers, statisticians, and the
federal statistical community in general.

This Issue Brief was prepared by Thomas Parrish, American Institutes for
Research. For more information on this Issue Brief, contact William Fowler (202) 502-7338.